The fighting between Israel and Hamas has escalated for a second day. Hamas rocket barrages are targeting the coastal cities of Ashdod and Ashkelon along with areas as far south as Dimona (seventy-five kilometers from Gaza and home to Israel's nuclear reactor). In all, 274 rockets have been fired at Israel so far, reportedly including a longer-range Fajr-5 aimed at the Tel Aviv area -- the first time since the 1991 Gulf War that the city has been targeted in this manner. And in the southern Negev region, three civilians were killed today when their apartment building was hit. Meanwhile, Israel says it has struck 250 Hamas targets in Gaza, apparently knocking out many longer-range rockets and weapon storehouses. This comes after Operation Amud Anan (Pillar of Defense/Pillar of Cloud) was launched on Wednesday, when Israel killed Hamas military chief Ahmed Jabari after days of escalation. Eleven Palestinians are believed to be dead.

In response to the crisis, Egypt has withdrawn its ambassador from Israel. Although President Obama has already urged Cairo not to escalate the situation, he will likely need to take further action to preserve Egyptian-Israeli peace and mobilize regional pressure on Hamas.

ISRAEL'S OBJECTIVES

At minimum, Israel seems bent on restoring the deterrence that kept Gaza fairly quiet after Operation Cast Lead concluded in early 2009. The relative calm that followed that ground assault lasted through 2011, but the situation changed this year. Since January, Gaza militants have fired 750-800 rockets into Israel, forcing many of the estimated one million civilians in the Negev to repeatedly head into bomb shelters and close their schools. Although the new Iron Dome rocket-interception system has mitigated the impact of this barrage, only a few batteries are operational, and they are deployed to metropolitan areas, not smaller towns. Moreover, the range and lethality of Gaza rockets have increased in recent years, putting more high-population areas at risk; for example, Israel's fourth-largest city (Beersheba, in the Negev) is a frequent target now.

Israel's approach to Gaza is also being shaped by uncertainty over whether Hamas will ever go after the jihadist factions that inflamed the situation in the first place. At various times since 2009, Hamas refrained from firing rockets itself but did not prevent Palestinian Islamic Jihad and other terrorist groups from doing so. Even when it did arrest the perpetrators of such attacks, it released them shortly thereafter. And in recent months, Hamas has actively participated in some attacks in response to jihadist accusations that it was abandoning the mantle of "resistance." In light of this track record, Israel has apparently decided that Hamas cannot be counted on to maintain a de facto ceasefire; hitting Jabari at the outset of yesterday's campaign indicates that hurting the group's operational capability was a central concern.

There is no evidence yet that Pillar of Defense is a prelude to a major ground operation aimed at degrading Hamas's capabilities, which would be costlier in terms of lives and damage. As for a sustained operation to displace Hamas as the governing body in Gaza, that was not Israel's objective in 2008-2009 and seems equally improbable today. The Palestinian Authority has not demonstrated that it is capable of taking control of the strip, and Israel prefers that there be some governing body there that can be held responsible in the event of rocket strikes or other attacks.

HAMAS AND EGYPT'S CALCULATIONS

Hamas seems to have miscalculated on several fronts. First, it may have believed that Israel would avoid major action for fear of antagonizing the new government in Cairo, given Gaza's proximity to Egypt and Hamas's close ties with the Muslim Brotherhood. It may also have believed that recent shows of regional solidarity (including the Qatari emir's visit to Gaza last month and ongoing support from Turkey) would raise the diplomatic cost of Israeli action to prohibitive levels.

In addition, Hamas may not have expected an attack against a high-profile target like Jabari, which was a change from Israel's pattern of sporadic retaliation to rocket fire. Indeed, Israel considered him a leading terrorist -- he was responsible for overseeing at least one suicide bombing in the late 1990s and was key in Hamas operations during the second intifada, when the group carried out numerous suicide attacks. And when Hamas took over Gaza in 2007, he organized its fighters into a military force with companies, battalions, and brigades. Jabari is also believed to have overseen the detention of kidnapped Israeli soldier Gilad Shalit, allowing himself to be photographed when Shalit was swapped for Palestinian prisoners last year.

As for Egypt, the Gaza crisis will test whether Cairo is a true peace partner eager to contain escalation or just another party seeking to stoke the fire. Obama's Wednesday phone call to President Muhammad Morsi reflects U.S. concern about the fragility of the 1979 Egypt-Israel peace treaty given the Muslim Brotherhood government's support for Hamas. In his first comments on the crisis, Morsi stated before a meeting of senior ministers, "Israel must realize that we don't accept the aggression, which negatively affects security and stability in the region." He added that Gazans should know "we stand by them to stop this assault on them."

Although Morsi has not objected to his security services playing a behind-the-scenes role in negotiating a ceasefire, it remains unclear whether he is willing to devote any political capital to making this happen in public. At the same time, he did insist that Hamas bolster its control over jihadists after militants killed sixteen Egyptian soldiers in a northern Sinai attack this summer.

TIMING

More broadly, the Palestinian issue is poised to return to prominence after some time on the world's back burner. Palestinian Authority president Mahmoud Abbas has turned down Washington's request to abort the planned November 29 vote on upgrading the PA's status at the UN General Assembly. That date is redolent with symbolism -- on November 29, 1947, the assembly voted for partition and a two-state solution, and Abbas has said it was a mistake for the Palestinians to reject that offer. It is not clear how, if at all, Operation Pillar of Defense will affect the UN question.

Meanwhile, Israeli defense minister Ehud Barak likely does not want any issue to divert too much attention from his main concern, the Iranian nuclear program. On one hand, this could be an argument for resolving the Gaza crisis quickly. On the other hand, taking the time to root out longer-range rockets in Gaza could be viewed as a way of minimizing potential retaliation from there in the event of an Israeli strike on Iran.

U.S. ROLE

Obama's phone call to Morsi showed the administration's understanding that the Gaza issue could have broader implications for Israeli-Egyptian relations and, in turn, the U.S.-Egyptian relationship. If Cairo makes the cold peace with Israel even colder -- for example, if both Morsi and new defense minister Abdul Fattah al-Sisi continue their refusal to meet with Israeli officials, or if they threaten to suspend the treaty -- it could further harm Egypt's standing in Washington at a time of mounting questions over the Morsi government's direction.

Policymakers should also acknowledge that the situation in Gaza -- with Hamas not doing much if anything to contain jihadist groups -- is inherently unstable. Egypt, Qatar, and Turkey have said that they are encouraging Hamas to adopt more moderate positions. Now is the time to test that claim. Washington should launch high-level efforts aimed at prodding all three governments to use their influence with Hamas, persuading the group to crack down on factions whose indiscriminate rocket fire provokes large-scale Israeli retaliation.

David Makovsky is the Ziegler distinguished fellow and director of the Project on the Middle East Peace Process at The Washington Institute. This article was originally published as PolicyWatch 1998 and is republished with permission.